Twenty-two days of speculation, conjecture, rumors, and outright nonsense await global money markets after Federal Reserve Chairman Jerome Powell hinted at conceivable interest rate cuts.
It is no longer about inflation; The Federal Reserve’s main fear is jobs. And watch as the interest rate assumptions overshadow all the hype surrounding Nvidia’s upcoming quarterly results.
When a rate cut is imminent, traders’ attention turns to the option of less expensive financing than more expensive generation stocks.
Chairman Powell stole the show from megatech corporations by doing what many expected: by obviously hinting at an imminent rate cut in his long-awaited speech at the start of the Kansas Fed’s Jackson Hole seminar.
He did his part, just as he did two years ago when he warned markets about the impending “pain” related to the central bank’s inflationary efforts.
On Friday, he delivered another message, albeit related to his caution for 2022, saying: “The time has come for politics to adjust. “
“The direction is clear, and the timing and speed of rate cuts will depend on the data, the evolving outlook and the balance of risks,” he said.
“I am convinced that inflation is on a sustainable path back to 2%,” Powell added in his opening remarks.
He noted that inflation, measured through the Federal Reserve’s PCE, had fallen to 2. 5% from a high of 7. 1% two years ago. Measured through the better-known customer value index, inflation fell from a peak of 9. 1% in mid-2022 to 2. 9% last month. Both are close to the Federal Reserve’s 2% target.
Then, as markets do, they immediately increase the duration and number of possible cuts this year. 0. 25% is no longer enough; Half a percentage point is now being called for by the same people who warned that rate cuts could be damaging and that inflation was proving to be “tough. “
Now it’s all aboard the fare reduction train, also known as “bringing back the sugar box. “
This year there will be three Feds: September 17 and 18, November 6 and 7, and December 17 and 18. A number of economists, analysts and commentators predict rate cuts in two or even three of those
As the end of the month approaches, the momentary GDP estimate for the June quarter will be released. Any improvement from the 2. 8% annual rate in the first estimate would require some relief of one percentage point. Also, the Fed’s favorite data on PCE finishing, revenue source, and costs will be released on Friday.
While those numbers are important, the labor data for August, on September 6, will be the most revealing.
The Federal Reserve is concerned about the sharp drop in the number of new jobs in July (down to 114,000) and the rise in the unemployment rate to 4. 3% from 4. 1% in June (although wage expansion fell up to 3. 6% year-on-year). ). This is even considered significant, especially considering that the unemployment rate was 3. 5% a year ago.
If the July low is confirmed, along with the August low and a strong or higher unemployment rate, then a rate drop of 0. 5% is likely. However, if the revisions increase the July figure and August is between 150,000 and 180,000, then a quarter percentage will apply. -Pointed relief could be more appropriate.
Powell also expressed optimism that a comfortable landing can be achieved, containing inflation without causing a recession. “There is a clever explanation for why the economy will return to a 2% inflation rate while maintaining a strong labor market,” he said.
What effect have Powell’s comments and market reactions had on the dollar and bonds?
The US dollar index fell to an 11-month low of 100. 68 on Friday, down 1. 74% last week. This led the Australian dollar to rise 1. 87% on the week, reaching its point since the beginning of 2024 at 67. 97 US cents.
U. S. bond yields fell to 3. 80% for the 10-year note, down five issues on the day and eight on the week. The yield on the two-year bond fell five issues on Friday to more than 3. 92%, which is expected to be more responsive to the Federal Reserve’s policy decisions.
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Increases across the board of Deep Leads’ resources: quality, tonnage and target area ABx Group has reported a 30% increase in its mineral resource estimate (MRE) at Deep Leads’ rare ion adsorption clay (IAC) earth deposit in northern Tasmania. The accumulation in MRE comes from 36 tested outlets, representing a significant northward extension for the existing Deep Leads prospect.
Lake Resources (LKE. ASX) – LKE has signed two non-binding memorandums of understanding within 10 days. Ford Company (Ford) has signed a memorandum of understanding for about 25,000 t/year and last week, Hanwa, a Japanese commodity trader, signed a memorandum of understanding for up to 25,000 t/yr. Subject to execution, this is a feat as Ford and Hanwa are poised to collaborate on long-term strategic partnerships with LKE. Commercial negotiations are still ongoing but should, namely if Ford and Hanwa inject new capital into LKE, removing additional risks in financing the task and thus ensuring that LKE and Kachi are fully funded.
Two recent gravity studies have particularly exceeded expectations and revealed prospects for extension of the existing MRE at Throssell Lake, as well as a significant expansion opportunity at Yeo Lake. This reinforces the prospect of a multi-decade Tier 1 SOP production center around Lake Throssell.
Lately, TMG is completing paintings in preparation for the PFS planned for early 2023, adding the start of drilling in Q3 2022, evaporation testing and permitting activities. The effects of these systems will affect the PFS and any long-term resource improvements.
The reference prices of SOPs have risen to around USD 940/t due to recent geopolitical events. The October 2021 scoping study assumed an SOP value of $550/t and contained a sensitivity study showing that each 10% accrued in value effects at a cumulative $144 million NPV of the $364 million allocation. The accumulation of about 70% compared to the scoping study implies a NPV allocation of approximately $1. 4 billion.
Despite falling oil and fuel prices, which fell by 5. 4% and 19. 7% respectively in August, Calima managed to show improvement in its main indicators.
WT Financial Group Limited (WTL) is a fast-growing diversified monetary company, founded in 2010 and indexed to the Australia Securities Exchange (ASX) in 2015. Their recommendations and product offerings are primarily provided through an organization of independent money advisors acting as legal advisors. Representatives. WTL in connection with its broker organization activities Wealth Today Pty Ltd (Wealth Today) and Sentry Group Pty Ltd (Sentry Group). He has approximately 275 advisers at over two hundred money advisory firms across Australia. It also operates a direct-to-consumer operation under its Spring Financial Group brand.
In May 2021, Corporate Connect analyst Marc Sinatra published a full study report on ASX-listed biotech Immutep Ltd (ASX: IMM). It was so inspired by IMM that Corporate Connect found it imperative to publish a follow-up report valuing the company, as the market did not see the great prospects of eftilagimod alfa (efti).
This follow-up report is published today. Using comparables, after adding a monetary rebate to its EV estimate and dividing by the total number of percentages issued, Corporate Connect now puts the fair price of a percentage of Immutep at AU$2. 20.